John Kovar - Victim of La Trobe Financial

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John's story shows how La Trobe Financial turned his home ownership to homelessness. It is a sad tale of non-bank home loan fraud, crippling fees and theft. John currently lives in a $150 caravan he managed to get at the tip while the home stolen from him is now valued at around 1.6 million.

There needs to be thorough investigation by an extended RC with the power to set in place recommendations for the compensation of individual bank victims and access to affordable and meaningful justice.

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La Trobe Theft and Fraud regulators won't look at

John Kovar (JK) La Trobe Financial

Case Summary

History

JK and friend bought a house with finance from La Trobe Financial

JK 4 years later buys the friend out with finance from La Trobe Financial.

JK told by a broker it had to be a business loan. JK questions the broker as applications states "business loan only if funds are predominantly used for business purposes" and he already had a mortgage on the house.

Wrong loan set up

2007: JK told by La Trobe's solicitor, it has to be a business loan and JK has to sign a non-coded loan form

$27,000 theft

Loan settlement $494,000 la Trobe charge $63,000 exit fees to change the mortgage security and make a further error in calculations that robs him of approx $27,000, adding to a total of $90,000

6 months after application and negotiations, JK accepts a reduction of $60,000, couldn't work out where $30,000 of his money had gone to. Missed summer business trading.

Exorbitant fees

Over the next 31 months although payments were intermittent, JK pays an average of $5,300 ($5,294.04) per month, the mortgage was $4,000 ($4,051.16) per month

The fees charged since taking on the loan average out to $6,295.16 per month

Interest only costing full loan in 5 years

JK would have had to pay La Trobe $10,000 per month to keep his home. That's a total of $320,365.11 for 31 months (loan was for $494,000), or he loses his home (which he did lose)

Continuing at a monthly rate of average $5,900 at that rate at 5 years the loan would cost $491,000 about the same as the loan amount $494,000. And that's an interest-only loan with fees charges and un-fixable miscalculations (THEFT).

House sold $230K under price

2011: La Trobe sold JK's property that he bought for $765,000 for $530,000 (loan amount plus agents fees) leaves no equity for JK.

La Trobe tried to make JK pay them another $54,000, which they say he still owes them.

Regulator not interested

2013: JK went to Financial credit Ombudsman, nothing JK said was dealt with or looked at. All JK got was "La Trobe is a professional company and can do no wrong."

Outcome

JK ended up with nothing, living in his car on Newstart allowance, (still on it now) eventually JK bought a caravan from the tip for $150, and that is still his home.

JK believes La Trobe owe him the equity and assets (approx total $500K) he had when he bought the house... plus interest.

Also the social loss and income loss he has experienced because of them. The property JK lost to La Trobe is worth about 1.6 million now.

Notes:

From Australian Dream To Poverty

John's story is a classic example of why the Banking and Financial Services Royal Commission needs to be extended. This type of case is under-represented. There needs to be thorough investigation by an extended RC with the power to set in place recommendations for the compensation of individual bank victims and access to affordable and meaningful justice.

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